Novo Nordisk A/S agreed to buy three manufacturing plants for $11 billion to help it meet surging demand for the obesity drug Wegovy and diabetes shot Ozempic.
Novo is paying its main shareholder, Novo Holdings A/S, in cash for the fill-finish sites. Novo Holdings on Monday agreed to buy the owner of the assets, Catalent Inc., in a deal with an enterprise value of $16.5 billion. The transactions are the largest ever for both Danish companies.
Catalent shares rose as much as 9.8% in New York. Novo shares, which have been soaring alongside demand for its drugs, gained as much as 3.8% on the news, touching a record. The drugmaker is Europe’s most valuable company with a market capitalization of more than $520 billion.
Novo Nordisk is under pressure to increase its supply of Wegovy as it faces competition from Eli Lilly & Co.’s recently approved Zepbound shot, which is predicted to become the best-selling drug in history. In patient trials, Lilly’s drug led to more weight loss than anything Novo has put out to date.
Read More: Eli Lilly’s $600 Billion Weight-Loss Empire Was Late, But Lucky
The acquisition of factories in Italy, Belgium and Indiana isn’t an immediate fix for Novo’s production problems. It will gradually increase manufacturing capacity from 2026 and onward, according to a spokeswoman. Production has been a thorn in the Danish drugmaker’s side even as it profits from the new class of obesity drugs it helped pioneer.
There are “clear business reasons for Novo Nordisk to acquire these three manufacturing plants in order to speed up supply of key products - not least Wegovy,” Brian Borsting, a credit analyst with Danske Bank A/S, said in a note to clients.
The deal for Catalent has the backing of Elliott Investment Management, the activist investor, which has a stake in the US company. The agreement is worth $63.50 per share in cash, a 17% premium to Catalent’s Friday close, according to a statement.
Catalent had drawn takeover interest from other market players as well. Last year life sciences company Danaher Corp. expressed interest. Based in Somerset, New Jersey, the contract manufacturer gained prominence during the Covid-19 pandemic as a producer of vaccines and treatments.
https://finance.yahoo.com/news/novo-buys-three-plants-11-122310173.html
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